Wage cuts, despite increase in minimum wage

minimum wage

minimum wageMillions of low-paid UK workers face the prospect of a "squeeze" on living standards despite an increase from today in the national minimum wage.

According to the Trades Union Congress (TUC), employees will suffer a real terms wage cut due to the 1.8% rise in the statutory hourly rate still being far behind RPI inflation which is running at 2.9%.

New rates

Under the changes, adults will see their hourly rate increase by 11p to £6.19, while the rate for apprentices will increase by 5p to £2.65 an hour.

However, there will be no change to the £4.98 an hour for 18 to 20-year-olds and £3.68 an hour for workers above school leaving age but under 18.

Commenting on the new rates, TUC general secretary Brendan Barber said: "While we are pleased that Government has rejected the siren calls of some employers to freeze the minimum wage for adult workers and apprentices, these increases are still far below inflation and will leave the lowest-paid facing a real terms cut.

"These new rates are a particular blow to younger people who will face the biggest hit on their living standards. There is no evidence that the minimum wage has had an adverse impact on young people's employment so it is hard to see the logic behind their pay freeze.

"Today's rate increases do not do enough to help hard-pressed families. We need a bolder increase next year otherwise the real incomes of minimum wage workers will continue to fall, along with consumer demand."

Do you think you are being paid below the minimum wage rate? If so, be sure to get help and find out exactly what you are entitled to.

Saving the pennies

With many people facing the possibility of a real term wage cut, it is therefore vital to make sure your family finances are in order.

You can do this by creating a family budget plan, detailing how much income you have coming in each month and finding out exactly how much you are spending.

This will allow you to highlight areas where you can make cutbacks, freeing up more cash for things like daily essentials.

Making the most of vouchers and in-store discounts on your shopping can also save you a significant amount of money, loosening the purse strings on your budget.